Hedge Fund JWM Partners to Cut Staff

Meriwether Fund, JWM Partners, to Lose Partners and Cut Staff
Connecticut based JWM Partners, a hedge fund run by former Long Term Capital Management founder John Meriwether, noted in its November letter to investors that it will lose four partners and cut staff at the hedge fund overall. The firm's largest fund, Relative Value Opportunity Portfolio, lost more than 40% in 2008 and has seen its assets under management shrink to about $550 million.

Among those leaving are Arjun Krishnamacharand JWM's CFO, Andrew Geisert. The firms is expected to cut total staff from 35 to 25.

JWM is just the latest in a long line of funds that have seen assets shrink and been forced to layoff staff including traders, back office support, and even the departure of senior partners.

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Myron Scholes' Platinum Grove Asset Management Halts Withdrawals.

Platinum Grove Asset Management, the hedge-fund firm co-founded by Nobel laureate Myron Scholes, temporarily stopped investor withdrawals from its biggest fund after it lost 29 percent in the first half of October.

With hedge funds down 20% this year on average, Nobel laureate Myron Sholes' hedge fund Platinum Grove Asset Management, is temporarily stopping withdrawals from its largest hedge fund after losing almost 30% in the first part of October alone.

Ironically, Scholes, who won the Nobel prize for economics in 1997, was also a key part of Long-Term Capital Management, one of the largest hedge funds to ever collapse. Platinum Grove managed $4.8 billion as of the end of Aug.

On Friday, Platinum Grove Asset Management released a statement" "Platinum Grove will use this period to consult with its investors and counterparties, determine their future intentions and manage the assets of the fund accordingly."

Largest Hedge Fund Failures in History

Here is a list of some of the largest hedge fund failures in history:

Amaranth Advisors- was an American hedge fund managing about US$9 billion in assets. In 2006, it collapsed after losing nearly $6 billion in a single week on natural gas futures. Amaranth's failure was the largest hedge fund collapse in history.

Long-Term Capital Management - Long-Term Capital Management was a hedge fund founded by John Meriwether in 1994 which collapsed in early 2000 after the Russian financial crisis. Meriwether's fund hired some of the brightest minds, including nobel laureates.

Wood River Capital Management- Founded by John Whittier, Wood River closed in 2005 after Whittier was accused of defrauding investors and was said to have had relatively little investment experience. They were later sued by Lehman and others for failing to pay for services.

Bayou Group- Founded by Samuel Israel in 1996, The Bayou Group was a hedge fund with nearly half a billion in assets, but investors accused Israel of fraud. Investors were promised the fund would grow nearly 20 fold in 10 years.

MotherRock - Founded in 2004, MotherRock had $450 million in assets in 2006 when it began having poor returns climaxing in a brutal June where it lost 26% and promptly shut down.

And surely after the poor returns hedge fund indeces showed in Sept and Oct of 2008, there are more hedge fund failures to come.